Role of Company Directors While running a company, directors must personally comply with obligations under Australian law. On this page we set out how to become a company director and the most significant responsibilities for small business company directors. As a company director, you must be able to guide and monitor the management of your company. Most directors of small proprietary companies will also be heavily involved in the management of the company. You should only agree to become a company director or secretary if you are willing, able, and committed to holding these important roles. You should not agree to be appointed as a director or secretary of a company on behalf of others who promise that 'you won't have to do anything' and ask that you 'just sign here'. You could be exposing yourself to serious liabilities if you accept such a role. Responsibilities of company directors As a director, you are responsible for overseeing the affairs of the company. You must comply with your legal obligations as a director under the Corporations Act 2001. This is the case even if you appoint an agent to look after your company's affairs. You must be fully up to date on what your company is doing, including its financial position. You should regularly speak with managers and staff about the affairs of the business and take an active part in directors' meetings. You must not use your position, or information obtained because of your position, to cause detriment to the company or to gain an advantage for yourself or someone else. When you make a business decision as a company director, you must, among other things, ensure that you: . make the decision in good faith and for a proper purpose . do not have a material personal interest in the decision and make it in the best interests of the company · find out and assess how any decision will affect your company's business performance, especially if it involves a lot of the company's money or could have a material impact on the company's reputation · keep informed about your company's financial position and performance, ensuring your company can pay its debts on time · get trusted professional advice when you need assistance to make an informed decision . make full and frank disclosure about any material personal interests you do have. There are penalties and consequences including civil penalties, compensation proceedings and criminal charges for directors who fail to comply with their obligations under Australian law. Director duties if a liquidator has been appointed
If a liquidator has been appointed to the company, the director has an obligation to give the liquidator: · a statement about the company's business, property, activities and financial circumstances · deliver all the records of the company to the liquidator · provide assistance to the liquidator as and when requested Responsibilities of shadow directors Even if you are not formally appointed as a director, you may still be subject to the same duties